On June 11, 2025 – The Federal Communications Commission (FCC) released a public notice detailing the proposed universal service contribution factor for the third quarter of 2025. The Office of Managing Director (OMD) has announced that the contribution factor will be set at 36.0 percent.
Key Highlights:
Rules for Calculating the Contribution Factor: The contribution factor is determined quarterly by the FCC based on the ratio of total projected costs of the universal service support mechanisms to the total projected collected end-user interstate and international telecommunications revenues, net of projected contributions.
USAC Projections of Demand and Administrative Expenses: The Universal Service Administrative Company (USAC) has submitted its projections for the third quarter of 2025, which include the following demands and administrative expenses:
- Schools & Libraries: $628.68 million in demand, $21.39 million in administrative expenses, with a prior period adjustment of -$10.89 million, resulting in a contribution requirement of $639.18 million.
- Rural Health Care: $172.36 million in demand, $8.61 million in administrative expenses, with a prior period adjustment of -$1.94 million, resulting in a contribution requirement of $179.03 million.
- High Cost: $1,133.67 million in demand, $19.53 million in administrative expenses, with a prior period adjustment of -$102.55 million, resulting in a contribution requirement of $1,050.65 million.
- Lifeline: $292.54 million in demand, $24.07 million in administrative expenses, with a prior period adjustment of -$71.68 million, resulting in a contribution requirement of $244.93 million.
USAC Projections of Industry Revenues: USAC has projected that the total collected end-user telecommunications revenues for the third quarter of 2025 will be $8.045954 billion.
Adjusted Contribution Base: The quarterly contribution base is calculated by decreasing the projected collected revenues by the projected revenue requirement and accounting for uncollectible contributions. The adjusted quarterly contribution base for the third quarter of 2025 is $5.872842 billion.
Proposed Contribution Factor: Using the adjusted contribution base and the total program collection, the proposed unadjusted contribution factor for the third quarter of 2025 is 35.9926 percent, which is rounded up to 36.0 percent.
Conclusion: If the FCC takes no action regarding the projections and the proposed contribution factor within 14 days of the public notice release, they will be deemed approved. USAC will then use the contribution factor to calculate universal service contributions for the third quarter of 2025. Contributors will be billed accordingly, and payments will be due on the dates shown on the invoices. Late payments will incur interest, and contributors may face enforcement actions for non-compliance.
The FCC public notice can be viewed here.
